Eli5- Where does money come from when it comes to aid to other countries?


With the huge earthquakes in Turkey the news is reporting the US is sending $3 million in aid. Where does that money come from? Is it in the form of supplies and manpower or is it just like a blank check sent to them?

In: 1

It can be all three.

If you see a headline of “5 million dollars in aid for XYZ” that number can be a combination of:

1 million dollars worth of personnel and special equipment (like rescue teams)

1 million dollars worth of supplies (bottled water and food)

3 million dollars cash.

It really depends on the specific case, sometimes the number is just the cash getting sent, sometimes it’s the value of the whole package.

Reporters are lazy, politicians are sneaky and greedy.

So when the politicians feel like they’ll be more popular if they help the people in Grand Fenwick they announce they’re spending $3,000,000 in aid, and the reporters report this. Then they take the money and go to their friends who help them get elected. They buy bottled water or whatever from those friends, possibly even for fair prices, and then ship those things, not dollars, to Grand Fenwick. That way *they* get to spend the money, because spending the money is powerful. The people in Grand Fenwick are happy to get the stuff, they don’t know who paid for it or how much, so they’re happy.

If a bridge was knocked down and aid cannot get somewhere, the politicians arrange for an American company (one that is their friend) to do the work of rebuilding that bridge. So again, the money stays where the politicians can get benefit from it, but the benefit will actually go to the people of Grand Fenwick.

Sometimes, of course, Grand Fenwick actually needs money. Luckily, Grand Fenwick owes the US government a lot of money, since much of the monetary aid they previously received was in the form of loans. So the government can forgive some loans, which is technically a gift. That does have to be paid for, on paper, so it does cost money, but you don’t have to come up with cash to forgive a loan.

There are lots of ways this works, but rarely is it simply cash handed over. Because that wouldn’t benefit the decision makers.

It can come in many forms. Sometimes it’s cash sent to the government or to nonprofit agencies like the Red Cross. Sometimes it’s in the form of supplies.